October 25, 2010 –
The Air Transport Association of America (ATA), the industry trade
organization for the leading U.S. airlines, applauded Department of
Agriculture (USDA) Secretary Vilsack for steps announced (see below) to
set America on a
sound path to greatly enhance the nation's independence from foreign oil
sources and reduce carbon emissions.

“ATA and its
member airlines, in close collaboration with USDA, the Boeing Company,
the Department of Defense and the Federal Aviation Administration are
working hard to procure and deploy environmentally preferred,
economically viable, domestically produced jet fuel; this includes
through long-term purchase agreements,” said ATA President James C. May.

“These new and
enhanced USDA programs will accelerate production of renewable aviation
fuels by U.S.
farmers. After formally launching the ‘Farm to Fly’ initiative just
three months ago, Secretary Vilsack has taken a leadership role in this
significant endeavor for aviation and for rural America,” said May. “Secretary
Vilsack's announced programs will provide investors, farmers, bankers
and U.S. energy
companies with the confidence to invest in these proven, green
technologies.”

ATA airline
members and their affiliates transport more than 90 percent of all
U.S.
airline passenger and cargo traffic. Annually, commercial aviation helps
drive more than $1 trillion in U.S.
economic activity and nearly 11 million U.S. jobs. On a daily basis, U.S. airlines
operate approximately 25,000 flights in 80 countries, using more than
6,000 aircraft to carry an average of two million passengers and 50,000
tons of cargo.

ATA also is a
co-founder and sponsor of the Commercial Aviation Alternative Fuels
Initiative® (CAAFI), which seeks to enhance energy security and
environmental sustainability for aviation through alternative jet fuels.
As a coalition of U.S.
commercial aviation interests, CAAFI stakeholders include all elements
of the international commercial-aviation industry, fuel suppliers,
universities and U.S.
government agencies. Below are the remarks by Agriculture Secretary Tom
Vilsack on Biofuels as Prepared for Delivery at the National Press Club, Washington, D.C.

Today, it is clear
that this Administration is engaged in job creation and opportunities
for economic growth across this entire nation – from
Manhattan, New York
City, to the Manhattan in Kansas and beyond.

In all corners
of America, this
Administration is taking significant strides forward to provide economic
opportunity so a farmer can confidently say to his children: stay here,
on the farm, create a future for your children and an energy future for America. So a
small business owner can say to her children: I'm contributing to our
community so you can raise your kids here, too.

Across the hall
this morning, the President's Director of his Domestic Policy Council,
Melody Barnes, along with Secretary Donovan of HUD, Secretary LaHood of
the Department of Transportation; and EPA Administrator Lisa Jackson,
will be discussing the Obama Administration's Partnership for
Sustainable Communities initiative and how it will work to support more
livable and sustainable communities across America. USDA is part of this
Partnership, and we wholeheartedly support their work.

Today, however, I
am here, rather than across the hall, to unveil a series of USDA
announcements, also supported by this Administration, that support the
development of a renewable fuels industry. An industry that will create
jobs and economic growth, primarily in rural America, but to the benefit of all America, because
this industry provides a chance at a cleaner environment and more energy
security for this nation.

Our country needs
a strong, vibrant rural economy. Unfortunately, over the past several
decades there have been times when it was neither strong nor vibrant.
Persistent high unemployment and poverty encouraged many to leave their
rural communities. A majority of rural counties lost population, and
with it came a loss of political representation.

President Obama
refuses to accept the notion that Rural America's past predicts its
future. He recognizes that the source of America's
innovative spirit and our enduring values remain rooted in our rural
areas.

The President's vision for a revitalized rural economy
that creates real opportunity for growth and prosperity centers on our
ability to add innovative technologies, open new markets for crops, and
better utilize our natural resources. The President ordered USDA to make
that vision a reality.

We've gone to work
immediately. USDA announced assistance under the Recovery Act for 334
broadband expansions designed to reach more than 6 million people and
250,000 businesses in rural and remote areas.

Broadband
access empowers farmers and ranchers with real time weather and market
information, small business owners with expanded markets, educators with
distance learning, public safety officials with more reliable
communications, and medical professionals with telemedicine. All of
which adds to the strength of rural communities.

By launching the
USDA led effort "Know Your Farmer, Know Your Food" we began to promote
better linkage between local producers and local consumers through
investments in processing, storage, and warehouse facilities. All of
which helps producer's bottom lines and creates new job opportunities.

USDA,
along with other federal agencies and departments, responded to the
President's call for a new age of conservation with the America's Great
Outdoors initiative. The report, to be issued next month, will highlight
the enormous economic opportunities inherent in increased access to the
outdoors, and the innumerable recreational opportunities arising from an
expanded use of the outdoors.

However, the
approach at the heart of the President's vision - which combines new
technologies, new markets, and better use of our natural resources - is
our nation's capacity to reduce its dependence on imported oil and
fossil fuels through the increased production and use of biofuels and
renewable energy.

No one can dispute that we remain too
dependent on imported oil. That dependency, absent action now, will grow
as our need for more energy grows. The Energy Information Administration
estimates that by 2035, US Energy consumption will have increased by
another 50 percent.

Thirty years ago
28% of the oil consumed in the United States
was imported. Today that figure is closer to 60 percent – some of which
comes from countries that neither like us nor support us. Today we still
send a billion dollars a day outside our shores helping other countries'
economies to grow while our economy recovers from a deep recession.

With
the disastrous oil spill in the Gulf of Mexico,
we are also reminded that the development of our own oil resources is
not without environmental and economic risk.

We can do
better. We have to do better. Rural America is where
we will do better.

The Renewable Fuel
Standard, known as RFS2, reaffirmed the goal of producing by 2022: 36
billion gallons of biofuels to include 21 billion gallons of advanced
biofuels.

Reaching that goal means importing less oil – at
least, according to a recent industry study, a $350 billon cumulative
total value of avoided petroleum imports over the 2010-2022 period. This
means $350 billion that we can keep here, in this country. This means
less fossil fuels releasing fewer toxins and having cleaner air to
breathe, and the industry projects a million new jobs with investments
of $95 billion in new biorefineries.

Today, we produce
around 12 billion gallons of ethanol biofuels and around 800 million
gallons of biodiesel. Very little of which is considered an advanced
biofuel. While, under the RFS2, the biodiesel is an advanced biofuel, we
are pushing the limits of technology and surging towards the production
of advanced cellulosic ethanol, biobutenol, drop-in fuels and other
advanced biofuels.

The benefits to
the economy and to consumers are outlined in a new Economic Research
Service study released today entitled Effects of Increased Biofuels in
the US Economy in 2022.

The study notes that unlike the
rising costs of fossil fuels priced to meet increased demand and
increased production costs, biofuel production costs will continue to
drop with each succeeding generation of biofuels.

The recent
EPA announcement authorizing E-15 for late model vehicles will help
boost demand. It already convinced NASCAR to use E-15. If it is good
enough for Jimmy Johnson to remain hopeful it will also be good enough
for earlier vehicles from 2001-2006.

Bottom line – this
industry needs more time to mature and more investments to grow. To meet
the 36 billion gallon goal, we will need to work harder and faster.

Incentives
helped build the biofuel industry and for the time being, incentives
need to continue. Congress should start by reinstating the Biodiesel
Production Tax Credit and providing a fiscally responsible short-term
extension of the Volumetric Ethanol Excise Tax Credit. At the same time,
we need to begin to think about reforms to the ethanol credit program to
make it more efficient and effective at addressing the full range of
challenges we face in meeting our goals for traditional and next
generation biofuels.

We have already
seen what happens when incentives are ended too quickly. The recent
lapse of the biodiesel tax credit cost that industry jobs – nearly
12,000 jobs were lost as production was cut in half– these are jobs we
simply cannot afford to lose.

But, tax credits, by
themselves, are not enough. Our effort must include identifying
additional feed stocks available throughout the country while
discovering more efficient production processes. Research and
development must intensify.

The President's
Biofuels Interagency Working Group report, Growing America's Fuel,
called for the establishment of five USDA regional Biomass Research
Centers for the development of non food biomass feed stocks. These
Regional Centers, involving a collaboration between the Agricultural
Research Service (ARS) and the U.S. Forest Service (FS), will focus,
accelerate, and coordinate the science and technology needed to
incorporate feed stock production into existing agricultural and forest
based systems.

The Centers will
also assist Rural Development officials in the development and
construction of biorefineries. The lead personnel at the Centers will
draw on the expertise of our entire USDA team including but not limited
to our Rural Development coordinators, Farm Service personnel, Natural
Resources Conservation Service officials, Forest Service experts, and
extension service specialists.

The Centers will service the
regions of the country best suited for advanced biofuel production in
the following locations:

1. The Northeast center will be located in Madison, Wisconsin, led
by the Forest Service. 2. The Central East Center will be located in
Lincoln, Nebraska, led by ARS 3. The Southeast center, a little more
complicated because so much is going on there, will be located both by
ARS in Boonesville, Arkansas; and Tifton, Georgia, and in Auburn,
Alabama, led by the Forest Service. 4. The Western Center will be
located in Maricopa, AZ 5. The Northwestern Center will be located
in Pullman, WA, led by ARS, and Corvallis, OR, led by the FS

Production of 36
billion gallons of biodiesel will require that biorefineries dot the
rural landscape. The Farm Bill of 2008 authorized investments to assist
in the construction of new biorefineries. Today, I am directing the
Rural Development mission area of USDA within 60 days to announce
support and funding under the current Biorefinery Assistance Program for
the construction (to commence in 2011) of a specific biorefinery or
bioenergy plant in each of the regions serviced by the regional centers.
In doing so, the entire country can begin to see the economic benefit to
producers and the job creation potential of the biofuel/bioenergy
industry.

I know that the
Department of Energy will also provide leadership in this effort.
Already the effort of the DOE is encouraging the construction of a
biomass facility that converts woody biomass into crude oil in the state
of Mississippi.

As
research identifies alternative feed stocks and as biorefineries are
built to process those feed stocks, producers must be encouraged to grow
the feed stocks. The Biomass Crop Assistance Program (BCAP) will provide
that assistance.

The final BCAP
Rule will be announced in the Federal Register tomorrow. Under the rule,
producers will receive financial help to defray the cost of producing,
storing and transporting alternative fuel stock.

The
assistance could be as much as 75% of the cost of establishing the new
crop as well as annual rental payments to help cover the costs of
transitioning from current cash crops.

Delivery of
biomass to a renewable energy or biofuel facilities will generate
matching payments to help reduce the costs that come from the logistical
challenges facing this new industry. In crafting the final rule we paid
attention to the concerns of industry and environmentalists,
particularly with respect to woody biomass. Assistance for woody biomass
will only be provided for materials removed from a forest for ecosystem
restoration and forest health purposes.

As these new
materials arrive at the biorefinery additional costs may be incurred by
processors. To relieve that risk for advanced biofuels production, USDA,
under section 9005 of the Farm Bill of 2008, will make payments to
impacted processors. Up to $281.5 million remains for this purpose. I
have directed that work on the final rule be completed by the end of
this year making these funds available.

Over time, a key
missing link in the effort to meet the RFS2 goal has been and will
continue to be the lack of convenient locations to obtain higher blends
of biofuels.

Convenient store operators and marketers remain
reluctant to incur the cost of new pumps and tanks. USDA and other
federal departments can and should offer help.

I have
instructed Rural Development officials to provide financial assistance,
using existing RD programs and resources, to provide matching funds to
help install 10,000 blender pumps and storage systems over the next 5
years. Work will commence immediately on putting that program together.

Our effort to
expand the biofuel industry will also include opportunities we control
within our own vehicle fleet at USDA. We are committed to make E 85 and
other blends of biofuels, including biodiesel mixes, more conveniently
located. We'll encourage more use of biofuels in our fleet of almost
43,000 vehicles. The impact can be significant. The Department reported
42,882 light, medium, and heavy duty vehicles in the motor vehicle
inventory in FY 2009. The approximate total fuel consumption was
19,500,000 gallons. The miles traveled by the USDA Motor Vehicle Fleet
were approximately 342,500,000 with approximately $41,000,000 in fuel
costs reported. We hope to provide the model for other federal
departments with large vehicle fleets.

The USDA is
already partnering with the Department of the Navy as it embraces a
biofuel future. Today, USDA announces another partnership with the
signing of a Memorandum of Understanding with the Federal Aviation
Administration (FAA). The FAA and commercial airline industry also see
the potential of biofuel as jet fuel. Under the MOU, the USDA and FAA
will work together with the airline industry over the next 5 years to
develop appropriate feed stocks that can be most efficiently processed
into jet fuel. Doing so will decrease the industry's current dependence
on foreign oil and help stabilize fuel costs in the long run.

I recognize that
some may doubt our capacity to meet the challenge of expanding the
biofuels industry. I do not under estimate the challenges, but I have
seen Rural America rise again and again to continually meet the large
challenge of providing food, feed, and fiber for the country and the
world.

Belief and action remain powerful forces to affect
change. I believe the state of the rural economy and President's vision
for revitalized rural
America
compels us to action now. I believe the goals articulated within the
RFS2 mandate action now. And, I believe the need for energy security, a
cleaner environment, and better economic opportunity in rural American
make the case for action now.

So, I am confident today that we at USDA, joined by those who live,
work, and raise their families in rural areas stand ready to take
action. Together, we will revitalize our rural economy and create
meaningful opportunity for those who see the future – and their future –
as brighter in a re-energized Rural America.